Balancing migration policies in a globalising world

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Much misplaced concern has greeted the rise in skilled workers moving abroad. The fear is that as the best and brightest from poorer countries migrate to the industrialised world, they will undermine development at home — and worsen inequalities in the global economy.

In my view this concern — while not unfounded — is overblown. It fails to take into account the ability of labour markets to adjust to change: as skilled workers leave, for instance, wages in that field rise in response to scarcity, attracting an influx of new skilled workers. It also overlooks the substantial impact of migrants’ incomes and investments on their home countries.

There has indeed been an “asymmetric” pattern of migration of the highly skilled from poorer to richer countries. Surprisingly, however, few developing countries apart from South Africa have complained of its impact on their development. I propose two explanations for this.

One is that the countries experiencing the heaviest losses of "brains" and talent are the very ones that have proven most adept at replacing them. The other is that the home countries' expected loss in productivity never happened, at least not to the same degree the theorists predicted. India and the Philippines, the world’s foremost suppliers of migrant professionals or graduates of higher education, illustrate this point.

Over the past decade, India's Institutes of Technology produce some 70,000 to 85,000 software engineers, and about 45,000 other information technology (IT) graduates every year. As a result of growing local and foreign demand, many new, public and private educational institutions — among them the Indian Institutes of Information Technology (IITs) — have emerged, doubling the number of graduates.

In the Philippines, the response of the market has been equally impressive. In the same period, the growth of graduates in mathematics and computer sciences rose by 32 per cent a year. While the country lost some 5,400 nurses to countries other countries every year, the annual number of nursing graduates exceeded 20,000 by the end of the 1990s.

This buoyant growth in graduate numbers is clearly fuelled by opportunities abroad for earning a higher private return on educational investments. But the impact of this migration on the economies of home countries must not be overlooked. India’s human resources may have been affected by the loss of over 100,000 IT workers, but its own software industry has grown by leaps and bounds, nearly tripling employment in this sector from 150,000 to 500,000 between 1997 and 2000. This has largely been driven by the success of Indian IT workers abroad. Many have returned, bringing millions of dollars home to invest in software companies or attract foreign multinationals into the country.

The impact of this new wealth has been felt beyond the IT sector, as rising incomes and consumption create positive knock-on effects throughout the economy. Evidence shows that, the more diversified an economy is, the more it can benefit from this process.

For a country losing promising graduates, restricting numbers of emigrants may have an intuitive appeal, since that country's ability to compete in certain markets depends on key groups of skilled workers. But applying this stance as a policy always begs the question of how a country determines which skills it needs most, and how many of the skilled need to stay. And such a policy can only succeed at a terrible cost to the rights of people to leave their country should they wish to. Success at somehow producing the “right” mix of educated manpower has eluded planners the world over, while border restrictions to keep citizens in is no longer viable for democratic societies.

So what moves do make sense in the new, globalising economy? There are a number: state subsidies to strengthen basic education, the main guarantee of an adaptable workforce; policies to correct imbalances between private returns on education such as wages, and social returns such as higher productivity; dual nationality laws to help preserve the rights of expatriates in their home countries; liberalisation of foreign exchanges to persuade emigrants to bring their savings home; and strong guarantees to private property, rather than appropriation by the state.

For the least developed countries, who can ill afford to lose skilled workers, the solution will have to be found elsewhere. While proposals for multilateral compensatory schemes have found little favour in international discussions, the interest of richer countries in temporary stays for foreign workers may open up possibilities for help with returning home, such as loans and resettlement packages. Some countries are already looking at specifically targeting development assistance at employing returning professionals.

However, it seems that there is no stopping the South-North movement of highly skilled workers over the coming decades, as the "knowledge industries" continue to dominate the economies of maturing post-industrial societies. The long-term solution will lie not in stifling the international circulation of accomplished workers and so impeding technological progress, but in re-investing some of the gains into human resource development in the poorest countries.

The author is chief of the migration branch of the International Labour Organisation.